By Frank Tang and Jan Harvey
NEW YORK/LONDON (Reuters) - Gold prices fell for a second consecutive session on Wednesday, weighed down by upbeat U.S. private-sector jobs data and minutes from the Federal Reserve's December meeting that showed the central bank was set to wind down its bond purchases at a steady pace.
Minutes of the Fed's December 17-18 policy meeting, released on Wednesday, showed many members of the policy-setting Federal Open Market Committee wanted to proceed with caution in trimming the asset purchases, and most wanted to stress that further reductions were not on a preset course.
The U.S. central bank's plans to trim its massive bond-buying program by $10 billion to $75 billion per month and an improving U.S. economic outlook will continue to pressure the metal, traders said.
"Unless there is a significant reduction in jobs, the expectation that the Fed will continue to repeal its bond-buying program remains the main focal point of the market, and that's why gold is under pressure," said David Meger, director of metals trading at Chicago futures brokerage Vision Financial Markets.
Spot gold was down 0.4 percent at $1,226.76 an ounce by 3:12 p.m. EST (2012 GMT).
Also Read
U.S. Comex gold futures for February delivery settled down $4.10 an ounce at $1,225.50, with trading volume about 5 percent below the 250-day average, preliminary Reuters data showed.
Bullion fell after the ADP National Employment Report showed U.S. private employers added a bigger-than-expected 238,000 jobs in December, the strongest increase in 13 months.
"The trend for much of the rest of the year is likely to be negative for gold as the positive trend of global economic growth reduces investor fears and eases overall demand relative to cyclical investments," said Robert Haworth, senior investment strategist at U.S. Bank Wealth Management's Private Client Reserve.
Gold was still up almost 2 percent in 2014 on equities losses and fund buying related to index rebalancing after it lost 28 percent last year for its biggest annual loss in 32 years.
INDEX REBALANCING
The yellow metal will see more than $1 billion in fresh buying from the annual rebalancing of the world's two largest commodity indexes beginning Wednesday, a spokesperson for the Standard & Poors Goldman Sachs Commodity Index <.SPGSCITR> and the Dow Jones-UBS Commodity Index <.DJUBSTR>.
Traders will now focus on U.S. non-farm payrolls and trade numbers on Friday. Non-farm payrolls are seen as a crucial indicator of the U.S. monetary policy outlook, given the Fed has explicitly said it will await an improvement in the jobs market before it accelerates stimulus tapering.
Among other precious metals, silver underperformed, falling 1.5 percent to $19.57 an ounce. Platinum edged down 26 cents at $1,410.49 an ounce, while palladium was down 0.7 percent at $733.47 an ounce.
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Pravin Char, Jane Baird, Marguerita Choy and Meredith Mazzilli)